PRESS STATEMENT PARTI SOSIALIS MALAYSIA 25TH NOVEMBER 2020
The suggestion by Inland Revenue Board CEO Datuk Seri Sabin Samitah to introduce capital gains tax in Malaysia to improve taxation equity and reduce tax evasion is welcome. Malaysia’s productivity has skyrocketed over the past 2 decades but inequality is worsening at ground level.
The government needs to exercise its responsibility to reduce inequality by redistributing national wealth. The absence of capital gains tax forces government to take up more debt and undertake more austerity measures.
The introduction of the Goods and Services Tax (GST) to plug our revenue deficit caused great misery to Malaysians with lower income. Hence, the absence of capital gains taxes made the rich richer while the poor became poorer.
Malaysia should introduce capital gain taxes on large fixed deposits, bank interest, shares, equities, cryptocurrency, precious metals, speculative assets, forex etc.
However, the capital gain should be calculated as taxable income. Thus, capital gains will be taxed progressively instead of solely using a flat rate. This will prevent retirees, small investors, and pension funds from being taxed at an equal rate with the billionaires.
Malaysia could look at OECD countries such Australia, Norway and Denmark for execution mechanisms. These nations have made it mandatory for banks and asset managers to declare their client’s capital income. This improves tax compliance and reduces tax evasion.
Parti Sosialis Malaysia (PSM)
Parti Sosialis Malaysia Negeri Melaka (PSM Melaka)